NEW YORK—JPMorgan Chase is trying to require its credit card customers to go into private arbitration to settle disputes, even if they involve an older account, by reintroducing provisions it dropped a decade ago, a new report indicates.
The change, which affects about 47-million accounts, including those for Chase's popular Sapphire cards, reflects a broader effort by Wall Street firms to prevent customers and employees from engaging in class-action lawsuits that can result in large settlements and bad publicity, the New York Times stated.
“Unlike court cases, arbitration cases do not leave a trail of public documents and they cannot be brought by groups of aggrieved customers,” the Times said.
To prevent the new individual arbitration agreement from taking effect, customers must object to it in writing by mail by Aug. 7, according to the notifications. Customers could still take action in small-claims court, the Times noted.
Patricia Wexler, a JPMorgan spokeswoman, said the change would affect “nearly all” of its credit card customers, except certain servicemembers and holders of its AARP card. She said arbitration was already “standard practice” for JPMorgan’s consumer banking and auto loan businesses.
“Data shows that arbitration is often faster, less expensive with better outcomes for our customers,” she told the Times.